The Rising Dominance of OPEC

By YOUSSEF M. IBRAHIM, Special to The New York Times

Published: December 12, 1989

PARIS, Dec. 11—
Reflecting its expansion into refining and distribution, Saudi Arabia's oil company has emerged as the largest oil company in the world, the Petroleum Intelligence Weekly said in its issue that was published today.

Three other national oil companies owned by members of the Organization of Petroleum Exporting Countries, those of Venezuela, Iran and Kuwait, rank fourth, fifth and tenth, respectively, the industry newsletter said.

The Saudi Arabian Oil Company, also known as Saudi Aramco, has always been a major producer of oil, as have the oil companies of other OPEC nations. But in recent years they have moved to become integrated oil companies that refine and market what they produce. Rankings Reflect Success

As a result, OPEC nations now refine more than 14.3 percent of the world's oil, compared with 8 percent in 1979. That shift in strategy has been previously noted, but the rankings issued today by the newsletter, which is published in New York, demonstrate how successful they have been.

While this trend would seem to contain potential dangers for major oil-importing nations, the Saudis and many other Persian Gulf officials have noted that their presence in Western markets carries with it an obligation to help promote economic stability.

''It is a sign of the times,'' said Gary Ross, president of Petroleum Industry Research Associates, a consulting firm in New York. ''Inevitably the reserves of these OPEC countries are putting them in a position to be the major players in all aspects of oil markets. One might say it is the end of one era and the beginning of another.''

The most important conclusion of the newsletter's study is that the power and reach of what were once the largest oil companies, like the Royal Dutch/Shell Group, now No. 2, and the Exxon Corporation, now No. 3, are declining, primarily because their access to oil reserves is strictly limited. Backed With Infinite Reserves

And the presence of OPEC national oil companies in world oil markets continues to grow and is backed with almost infinite reserves that are expected to last well over 100 years.

''I think what it tells us about the future of the world oil markets is that national oil companies from OPEC are going to be the dominant force of the 90's,'' said Thomas Wallin, a senior editor of the Petroleum Intelligence Weekly who participated in the study.

The industry newsletter said it had based its rankings on a detailed study of ''six basic operation indicators, including oil and gas reserves, production, product sales and refining capacity.'' It added that the rankings ''draw on data from about 100 firms worldwide, excluding Communist countries, for 1988.'' #128 Years of Production A chart shows that Saudi Aramco has at least 128 years of production from its enormous oil reserves, which are estimated at more than 250 billion barrels of oil. By contrast, Exxon, based on its current reserves of 7.4 billion barrels of oil, has only 11 years of production ahead of it.

Other OPEC giants with huge reserves include Kuwait, with 171 years of production ahead; Iran, with 110 years; Iraq, with 101 years; Libya, with 61 years, and Venezuela, with 80 years.

By contrast, Royal Dutch/Shell has reserves that will last 14 years, the Mobil Oil Corporation has 12 years of reserves ahead of it, the British Petroleum Company can go on pumping for 13 years, and the Chevron Corporation for 9 years.

Until a few years ago, reserves in the ground mattered little, and an oil company's weight was measured primarily by its financial reach and the distribution network of refineries and gasoline stations it had to get its oil, or oil it purchased, to clients. Spread to Asia Predicted

Now, more OPEC countries have the money to expand their distribution networks and are acquiring refineries and gas stations from the largest established companies, in effect replacing them in many markets in Western Europe and the United States. Eventually that process will spread to Asia, OPEC officials say.

In recent years, the Kuwait Petroleum Corporation has bought a vast refining and distribution network in Belgium, the Netherlands, Britain, Sweden, Denmark, Belgium and Italy, with a total volume of about 300,000 barrels a day.

Saudi Arabia has bought a large refining and marketing network by entering into a joint venture with Texaco Inc. last year on the East Coast of the United States, with a total refining capcity of 600,000 barrels a day. Venezuela has bought into the Gulf Coast of the United States and agreed to joint ventures in West Germany and Sweden with local companies.

Libya has slowly purchased a distribution network in Italy and a refinery in West Germany, joining Kuwait in entering the West European market directly. Bigger Refining Role

Even as the OPEC nations increase their share of refining and distribution, the presence of large oil companies like Exxon, Texaco and Mobil is shrinking. Kuwait, for instance, purchased much of its West European network from what was the Gulf Oil Corporation, which was acquired in 1984 by Chevron.

Oil experts said the exclusion of Communist countries, most importantly the Soviet Union, from the study was of little consequence since Moscow's production ability has been declining. The Soviet oil industry is in serious trouble because of inefficient management, poor drilling techniques and lack of investment.

PlanEcon, a Washington-based consulting firm that specializes in the economic affairs of Soviet and Communist countries, estimates that the Soviet Union's oil production will drop this year by 300,000 barrels, to 12.15 million barrels a day. More importantly, says a PlanEcon economist, Charles Movit, Soviet oil production ''will continue to decline through the early 1990's,'' to around 11.6 million barrels a day, before stabilizing. 'Only 14' Are American

Among the Petroleum Intelligence Weekly's main conclusions is that ''companies from 34 different countries make up the top 50, with the historically dominant United States oil industry accounting for only 14.''

The study says 30 of the 50 largest oil companies are entirely state-owned or largely state-owned and ''they are getting better at acquiring downstream refining and marketing assets in consuming countries,'' like refineries and gasoline stations.

The state-owned oil companies include Petroleos Mexicanos, Indonesia's Pertamina and Algeria's Sonatrach, but by far the largest belong to Saudi Arabia, Kuwait, Iran, Iraq, Venezuela, the United Arab Emirates and Libya. Those seven nations hold well over 70 percent of the world's reserves of oil and gas.